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The reason for the distinction between economic growth - economic development The reason for this distinction between eg and ed is because of the way income is distributed: it is possible for a nation’s economic output per person to increase (growth), but a large number of people can have their income decrease at the same time if the increase in output is earned by a small percentage of the population for example, if 80% of the population is in traditional agriculture and 20% are in the modern sector then the average income per person can increase due to large gains by the modern sector minority but the income of the 80% of the population in the traditional sector can simultaneously be falling over time. Thus an increase in GDP per capita is insufficient to say development is occurring 1-7